Townsend v. Quadrant Corp.

268 P.3d 917
CourtWashington Supreme Court
DecidedJanuary 5, 2012
Docket84422-4
StatusPublished
Cited by46 cases

This text of 268 P.3d 917 (Townsend v. Quadrant Corp.) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Townsend v. Quadrant Corp., 268 P.3d 917 (Wash. 2012).

Opinion

268 P.3d 917 (2012)

Donia TOWNSEND and Bob Perez, individually, on behalf of their marital community, and as class representatives; Paul Ysteboe and Jo Ann Ysteboe, individually, on behalf of their marital community, and as class representatives; Vivian Lehtinen and Tony Lehtinen, individually, on behalf of their marital community, and on behalf of their minor children, Niklas and Lauren; Jon Sigafoos and Christa Sigafoos, individually, on behalf of their marital community, and on behalf of their minor children, Colton and Hannah, Petitioners,
v.
The QUADRANT CORPORATION, a Washington corporation; Weyerhaeuser Real Estate Company, a Washington corporation; and Weyerhaeuser Company, a Washington corporation, Respondents.

No. 84422-4.

Supreme Court of Washington, En Banc.

Argued May 19, 2011.
Decided January 5, 2012.

*918 Lory Ray Lybeck, Brian Clifford Armstrong, Lybeck Murphy, LLP, Mercer Island, WA, for Petitioners.

Michael Ramsey Scott, Laurie Lootens Chyz, Michael Jacob Ewart, Hillis Clark Martin & Peterson, PS, Seattle, WA, for Respondents.

Bryan Patrick Harnetiaux, Attorney at Law, David P. Gardner, Attorney at Law, George M. Ahrend, Ahrend Law Firm, PLLC, Moses Lake, WA, amicus counsel for Washington State Association.

ALEXANDER, J.[*]

¶ 1 We granted review of a decision of the Court of Appeals in which that court reversed the superior court's denial of a motion by a corporate home seller and its parent companies to compel certain home purchasers to engage in arbitration pursuant to an arbitration clause in the purchase and sale agreement. We affirm the Court of Appeals.

I

¶ 2 Donia Townsend and Bob Perez (Townsend), Paul and Jo Ann Ysteboe, Vivian and Tony Lehtinen, and Jon and Christa Sigafoos (collectively Homeowners) purchased homes from the Quadrant Corporation (Quadrant). Quadrant, which builds and sells homes, is owned by Weyerhaeuser Real Estate Company (WRECO), which, in turn, is owned by the Weyerhaeuser Company (Weyerhaeuser). At the time of purchase, each couple entered into a purchase and sale agreement (PSA) with Quadrant. The PSA contained a clause that required that

[a]ny controversy or claim arising out of or relating to this agreement, any claimed breach of this agreement, or any claimed defect relating to the property, including without limitation, any claim brought under the Washington State Consumer Protection Act (but excepting any request by *919 Seller to quiet title to the Property) shall be determined by arbitration.

Clerk's Papers (CP) at 640.[1]

¶ 3 Several years after the home purchases, Townsend and the Ysteboes jointly filed a lawsuit in King County Superior Court against Quadrant, WRECO, and Weyerhaeuser, alleging outrage, fraud, unfair business practices, negligence, negligent misrepresentation, rescission, and breach of warranty. In support of these allegations, they claimed that Quadrant knowingly engaged in shoddy workmanship in building the homes and that this resulted in serious construction defects that caused personal injuries relating to mold, pests, and poisonous gases. They also claimed that the PSA, as well as the arbitration clause contained therein, is unenforceable.

¶ 4 Shortly after Quadrant received notice of the lawsuit, it filed a motion to stay proceedings and compel arbitration. At about the same time, WRECO and Weyerhaeuser filed a motion for summary judgment contending that, aside from the parent-subsidiary relationship with Quadrant, "neither [WRECO] nor Weyerhaeuser ... has any connection to the plaintiffs or their houses." CP at 61. The superior court denied these motions.

¶ 5 The Lehtinens and Sigafoos, individually and on behalf of their minor children, then each separately filed a lawsuit against Quadrant, WRECO, and Weyerhaeuser, asserting causes of action identical to those asserted by Townsend and the Ysteboes. A King County Superior Court judge consolidated all of the actions filed by the Homeowners for "pretrial purposes." CP at 144.

¶ 6 Quadrant again moved to compel arbitration and WRECO and Weyerhaeuser sought similar relief. The superior court denied the motions, concluding that there were issues of fact about whether the PSA was a negotiated contract or a contract of adhesion.

¶ 7 On appeal, the Court of Appeals, Division One, reversed the superior court, concluding that "[t]he issue of the PSA's procedural unconscionability is a matter reserved for the arbitrator." Townsend v. Quadrant Corp., 153 Wash.App. 870, 885, 224 P.3d 818 (2009) (citing RCW 7.04A.060(3)). That court also determined that the claims of the children of the Homeowners' were subject to the arbitration clause and that WRECO and Weyerhaeuser did not waive their right to arbitration by moving for summary judgment. We thereafter granted the Homeowners' petition for review. Townsend v. Quadrant Corp., 169 Wash.2d 1021, 238 P.3d 504 (2010).

II

¶ 8 We engage "in de novo review of a trial court's decision granting a motion to compel or deny arbitration." Satomi Owners Ass'n v. Satomi, LLC, 167 Wash.2d 781, 797, 225 P.3d 213 (2009) (citing Adler v. Fred Lind Manor, 153 Wash.2d 331, 342, 103 P.3d 773 (2004)). "`The party opposing arbitration bears the burden of showing that the agreement is not enforceable.'" Id. (quoting Zuver v. Airtouch Commc'ns, Inc., 153 Wash.2d 293, 302, 103 P.3d 753 (2004)).

III

¶ 9 The primary issue before us is whether the procedural unconscionability question presented by these facts is one to be decided by an arbitrator or the court.[2] The Homeowners contend that "where there is a challenge to an integrated arbitration clause, the court, not an arbitrator, must evaluate evidence of contract formation when determining whether an arbitration provision is procedurally unconscionable." Pet'rs' Suppl. Br. at 12. Quadrant, WRECO, and Weyerhaeuser respond that the question is to be decided *920 by an arbitrator, rather than the court, because the Homeowners framed the procedural unconscionability issue in terms of the PSA generally, rather than "only and specifically" as to the arbitration clause. Answer to Pet. for Review at 11.

¶ 10 The Court of Appeals agreed with Quadrant and its parent companies, holding that under these facts the question of procedural unconscionability is for an arbitrator to decide because the Homeowners challenged the enforceability of the PSA as a whole. It said that under RCW 7.04A.060(2), "a court may entertain only a challenge to the validity of the arbitration clause itself, not a challenge to the validity of the contract containing the arbitration clause." Townsend, 153 Wash.App. at 879-80, 224 P.3d 818 (citing McKee v. AT & T Corp., 164 Wash.2d 372, 394, 191 P.3d 845 (2008)).

¶ 11 In reaching its decision, the Court of Appeals looked to provisions of the uniform arbitration act (UAA), chapter 7.04A RCW.

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Cite This Page — Counsel Stack

Bluebook (online)
268 P.3d 917, Counsel Stack Legal Research, https://law.counselstack.com/opinion/townsend-v-quadrant-corp-wash-2012.